Remember a few years ago when the pandemic messed up freight schedules, and everyone ended up with a lot more inventory than they needed?
Well, call it déjà vu, but inventory—specifically how much of it is on hand and how quickly companies can get through it—will likely be top of mind for retail CFOs again in 2026.
One supply chain expert predicted that inventories are likely to remain low across retailers this year, because they aggressively pulled stocks forward ahead of tariffs in 2025.
CFOs who wish to win the supply chain game this year will need to be focused on “dynamic inventories,” Zac Rogers, an associate professor of supply chain management at Colorado State University, told CFO Brew.
“We’re trying to turn inventories over much quicker, which is going to mean that inventories generally are going to be lower in 2026, but the cost of moving those inventories, because they’re moving so fast, will probably be a little higher,” Rogers said.
Last year, Rogers said more retailers used larger-load, cheaper train freight to avoid the pricier truck freight in light of tariffs. But in 2026, he’s already begun to see truck freight being used more to ensure the inventory gets to warehouses and storefronts as quickly as possible.
“Trucks are faster than trains, but they’re also more expensive, and that extra expense might be something the retailers have to deal with, [and] possibly something consumers have to deal with, depending on how they dole it out,” Rogers said.
“But the layout is really going to change; it’s all going to be driven by, instead of accumulating, we’re moving as fast as we can.”
Front lines. Dollar Tree is focused on exactly that. In its December earnings report, the discount retailer said its inventory was down 5% over the prior year, but sales were up over 9%. CFO Stewart Glendinning added on the earnings call that the inventory reduction “reflects our focused efforts to increase inventory turns and improve shelf productivity.”
Meanwhile, makeup retailer Ulta’s inventory jumped 16% in the third quarter, which it attributed to the launch of new brands and stores.
Ulta CEO Kecia Steelman, though, said that recent investments in its Dallas distribution center would help to push through the $2.7 billion in inventory the company had on hand as of Nov. 1.
Nike, like many other companies in the year after the pandemic, faced shipping disruptions and other supply chain roadblocks.
And while Nike’s overall inventory has been slightly down the first two quarters of the fiscal year, CFO Matthew Friend told analysts on a Dec. 18 earnings call that company-wide margins in Q2 had been negatively affected by tariffs and “inventory obsolescence”—also known as deadstock—“in Greater China that was not contemplated 90 days ago.”
CFOs looking to protect and improve their company’s cash flow this year, besides just having less inventory on hand, Rogers said, could brainstorm ways to extend payment terms with wholesalers.
“Instead of ‘We’ll pay in 30 days,’ maybe we’ll pay in 60, maybe we pay in 90. How can we stretch out the cash in our supply chain as much as we can?”